Reid endorses healthcare co-ops as Speaker Pelosi signals flexibility

Senate Majority Leader Harry Reid (D-Nev.) endorsed the concept of
health insurance cooperatives Thursday, siding with centrists in the
House and Senate who want healthcare reform but oppose a public option.

House Speaker Nancy Pelosi (D-Calif.) also hinted she could accept that approach a day after President Barack Obama delivered an address to a joint session of Congress that offered encouraging words for both centrists and liberal Democrats who have demanded a public insurance option

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Reid told reporters that healthcare cooperatives could be as effective as a government insurance plan in fostering competition and reining in costs.

“The purpose of a public option is to create competition, which is so important, and to create quality healthcare,” Reid said at a press conference. “If we can come up with a concept of a cooperative that does just that — that is, it makes more competition and makes insurance companies honest — yes, I think that would fit the bill.”

Like Obama and Pelosi, Reid has said that he personally favors setting up a government insurance program.

Obama, who met with Reid and Pelosi on Thursday, had struck a similar chord in his address, calling the public option “a means to that end” and adding, “we should remain open to other ideas that accomplish our ultimate goal.”

This prompted Senate Finance Committee Chairman Max Baucus (D-Mont.) to say Thursday that Obama’s speech could help him win bipartisan support for the legislation he’s toiled on for months.

Baucus noted that the policies Obama outlined closely match the proposal Baucus presented to his bipartisan group last weekend, which will be the basis of a bill he will introduce next week and mark up in the committee the following week.

In his speech, Obama adopted the $900 billion price tag of Baucus’s proposal rather than the $1 trillion-plus cost estimated for other healthcare bills pending in the House and Senate. Obama also reiterated his support for the creation of an independent panel to set Medicare payment policy, which Baucus has included in his proposal.

Centrist Democrats in the House saw much of the same.

“It was mostly in tune with the Senate Finance Committee,” said Rep. Jim Cooper (Tenn.), a veteran Blue Dog Democrat. “The public option was very circumscribed.”

Many centrist Democrats have long believed that regional co-ops were the more preferable “other idea” — a stance that has infuriated liberals.

Though Baucus’s bill will not include a public option, many Democrats believe Obama left them enough of an opening to advance two specific compromises concocted by senators negotiating with Baucus — Sen. Kent Conrad’s (D-N.D.) proposal creating federally chartered, not-for-profit, member-owned healthcare cooperatives that would compete with traditional insurers, and Sen. Olympia Snowe’s (R-Maine) public option “trigger” that would only be pulled if private insurers fail to enroll enough people under reform.

And in a scenario that was difficult to imagine a month ago, House leaders, including Pelosi, reacted to the new momentum behind co-ops and the Baucus bill not with further disdain, but with open arms.

“From what we’ve heard of it, there are many good things that are consistent with what we have in our bills and some things where there are areas of disagreement … I don’t want to say disagreements, they’re just different proposals, and we’ll see how we resolve the different pieces of legislation,”

Pelosi told reporters Thursday at her weekly press conference.

Pelosi reiterated her preference for a public option, but indicated a new willingness to follow another direction.

“This is about a goal. It’s not about provisions,” she said. “As long as our goal of affordability and accessibility and quality, meeting the four — which you don’t want me to repeat again — goals that we have in the legislation, then we will go forward with that bill.”

But Reid’s definitive support of co-ops as a way to achieve the president’s dual goals of increased competition and lower costs paves the way for a bill containing such a proposal to shape the debate going forward.

House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) said that even though the process of merging three House bills together into one package could be completed before the Senate Finance Committee starts marking up its bill Sept. 21, there was a growing sense that the Senate will end up influencing how the House proceeds.

Asked if the House would wait for the Senate to produce a bill before voting, Rangel said, “I think that would make a hell of a lot of sense.”

House liberals, though, remain something of a wildcard.

They walked away from Obama’s speech believing that the president had stood in defense of the public option by stating that it was his preferred choice as well.

Immediately after Obama’s speech and throughout most of the day on Thursday, liberals largely praised Obama’s reaffirmed commitment to a public option and joined him and many of their leaders in getting beyond what the various provisions are called and moving toward accepting any formula that met Obama’s “means to an end” criterion.

“I’m not going to quibble over what something is called,” Rep. Lynn Woolsey (D-Calif.), one of the leaders of the Progressive Caucus, told The Hill on Wednesday night. “I’m going to quibble over whether or not something leads to quality, affordable coverage for every American.”

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But by Thursday night, that openness seemed to be morphing back into the same concern liberals had after their leaders cut a late-July deal with conservative Blue Dog Democrats to advance a healthcare bill out of the Energy and Commerce Committee, which watered down the public option too much for their taste.

After holding a public option “special hour” on the House floor on Thursday, the Progressive Caucus requested a meeting with Obama to further clarify his position on the public option.

“We look forward to meeting with you regarding your support for defining the public option in any final healthcare reform bill and request that the meeting take place as soon as possible,” said the letter sent by Woolsey and Rep. Raúl Grijalva (D-Ariz.), the co-chairmen of the Progressive Caucus.